The CFTC on Monday opened the first formal US federal rulemaking for leveraged crypto trading, asking for public comment on a framework that would let crypto exchanges register with the agency instead of piecing together dozens of state money-transmitter licenses. The move follows the Senate’s failure last month to advance the Clarity Act, the market structure bill the industry had spent hundreds of millions of dollars lobbying for. Bitcoin traded near $86,000 as the news landed, roughly where it closed the prior week, so markets treated the announcement as a process step rather than a shock.
The proposal arrived as an advance notice of proposed rulemaking, release 9307-26, with a 60-day comment window. Two draft rule sets sit inside it. Regulation CTX covers the transactions themselves: leveraged, margined and financed crypto deals under section 2(c)(2)(D) of the Commodity Exchange Act, the same legal hook that already governs leveraged retail commodity trades. Regulation CAM covers the venues, creating a new registration category called a crypto asset market, a lighter status than the full designated contract market held by futures exchanges.
What the drafts would require
A notice from the CFTC describes a structure where registered futures commission merchants sit between customers and the exchange, a model borrowed directly from futures brokerage. Trades would carry Bank Secrecy Act checks against money laundering, the same screening banks apply today. A carve-out would keep deals that settle within 28 days outside the rules, treating them as actual delivery, according to CoinDesk’s reporting on the package. That carve-out has been part of commodity law for decades and matters for any exchange offering instant settlement.
Platforms registered as crypto asset markets would face anti-manipulation rules and proof-of-reserves checks on the pooled customer funds they hold, requirements that several large offshore venues already publish voluntarily. The CFTC is not setting a leverage cap in the draft. Chairman Michael Selig said in a Wall Street Journal column Monday that the agency lacks the authority to force crypto assets onto CFTC-registered platforms without Congress, so participation stays optional and exchanges keep their state licenses if they prefer.
“Today’s action is a critical step in the CFTC’s ongoing efforts to ensure America remains the crypto capital of the world,” Selig said in the agency’s statement. “The American people deserve clarity, certainty, and consumer protections in the crypto asset markets.”
| Element | Regulation CTX | Regulation CAM |
|---|---|---|
| Covers | Leveraged, margined retail crypto trades | Venues offering those trades |
| Legal basis | Commodity Exchange Act s. 2(c)(2)(D) | New registration category |
| Key requirements | FCM intermediary, BSA checks, 28-day delivery carve-out | Anti-manipulation rules, proof of reserves |
| Mandatory | No, opt-in federal route | No, opt-in federal route |
The spot gap stays open
The draft rules reach only leveraged and financed trades. Plain spot buying and selling of bitcoin or ether stays under state money-transmitter licenses, the same patchwork as today, and the CFTC keeps just its fraud and manipulation powers over that activity. The Commission itself pointed at the gap: the Clarity Act would have handed the agency direct authority over the spot market, and the Senate failed to advance it on a cloture vote in September after months of negotiation over ethics provisions aimed at public officials profiting from crypto ventures.
Selig framed the rulemaking as the answer to that vacuum. “For years, entrepreneurs building on the new frontier of finance faced uncertainty about whether there was a place for them in our markets,” he said, according to Reuters. “We are giving them an answer.” He added that the rules are designed to “prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX,” a reference to the 2022 collapse that still shapes how Washington talks about crypto oversight.
A rulebook arrives with a second one stacked on top
The CFTC is not alone. The SEC issued its own proposal on October 1, a 682-page custody framework that would let investment advisers self-custody client crypto in some circumstances and use state trust companies as custodians. Two days later the SEC approved listing rules for 3x leveraged bitcoin and ether ETPs from Volatility Shares under Cboe BZX rules, though the products cannot trade until their Form S-1 filings go effective. In late September the same CFTC registered Coinbase Clearing as a US derivatives clearinghouse, groundwork that makes Monday’s venue registration look like part of a sequence.
Firms that spent years asking for federal clarity now face two agencies writing two rulebooks for one market. Nothing in either draft settles which regulator wins when a token looks like both a commodity and a security. The CFTC’s parallel work on prediction markets and the SEC’s earlier innovation exemption for tokenized stocks add more parallel rules to the stack.
Timeline and what to watch
An advance notice is an early step, not a binding rule. After the 60-day comment window closes, the CFTC can draft formal proposed rules, which open a second comment round before anything applies. No effective date exists.
Three questions follow from here. Whether Congress revives the Clarity Act and redraws the lines between the agencies, since a revived bill could supersede parts of this framework. Whether large exchanges actually take the federal badge or keep the state licenses they already operate with, which will show how attractive the opt-in really is. And whether the SEC and the CFTC can agree on where a token stops being a commodity and starts being a security, the underlying fight that stalled the legislation in the first place. The CFTC has also left leverage limits unset, deferring that fight to a later round.
For traders the practical effect is modest today. Leveraged venues could register, standardize their disclosure and pick one federal rulebook, while spot markets stay as they are. The heavier consequences land later, after the comment filings and the second proposal, and after whatever Congress does with market structure next.